Summary: The Truth Behind The Business Strategy Of Outsourcing

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The Truth behind the Business Strategy of Outsourcing The United States is one of the richest countries in the world, admired by other countries because of its strategic level of productivity and consumerism. To maintained the United States high demand, the country must adopt and develop new innovations in order to compete with other markets. Because the goal of most businesses is to create profit, the United States is one of the main countries to take their business to cheaper markets with the objective to increase profits by reducing labor cost and operating expenses. Outsourcing means “the usage of outside vendors to produce goods or fulfill services and functions that were previously handled in-house or in-country” (Boone & Kurtz, 2015). …show more content…
From the business point of view it is important to understand that outsourcing is part of globalization, and it benefits the company’s efficiency and it saves money in labor. Many Americans believe that outsourcings hurt Americans economy and are against the idea of taking Americans jobs to other countries. Bryson, a global economist for Wells Fargo said: “When jobs move from a factory in the South to one in Guatemala or China, it certainly has a negative impact on that community in the short run…But in the long run it makes things more efficient." (Hargreaves, 2012) And in fact it might make things more efficient for the company because it is relatively easier to establish a business in China than in the United States, however it is inedible to ignore the impact in American workers. “Over the past decade data from the United States Department of Commerce show that U.S biggest companies that employ a fifth of American workers reduced their work forces by approximately 3 million jobs while increasing employment overseas. Although outsourcing might not be the only reason for unemployment in America, it is unpleasant for the work force to know that millions of jobs were taken to other countries in a period of time on which American has suffered with high unemployment levels. Efficiency might be one important reason to take jobs outside of the United …show more content…
In the article The Case of Outsourcing, Hargreaves says outsourcing is a two way street, meaning it benefits the United States as well as the country were good are being produced. “Those helped are the workers in foreign countries who get the manufacturing jobs. They can then enter the developing middle class, which in turn increases demand for goods produced in the United States,” but which goods is he talking about if everything is being made overseas? Is he talking about the jobs that cannot be outsourced such as agriculture, dairy, landscaping, construction, and retails jobs? The jobs Americans do not want. According to Chamie the government is urging businesses to insource, which has only increased the number of illegal immigrant workers in the United States. In order for companies to maintain low domestic labor cost they seek to hire unauthorized workers, then the companies can refuse to pay them minimum wages, fail to comply with safety standards and not pay them employee benefits. “While outsourcing jobs and insourcing immigrant labor may indeed increase profits and be beneficial by lowering labor cost and operating expenses, the general public and especially native workers find these practices to be onerous” (Chamie, 2016) These

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